Source:|Author:Ice Tang|Publish time: 2021-10-21|31 Views
On October 17, 2020, the Standing Committee of the National People’s Congress in China promulgated the fourth amended Patent Law of the People’s Republic of China, which came into force in its original form in 1985, with subsequent amendments in 1992, 2000, and 2008. The amendment will come into effect on June 1, 2021. The amendments involve in total 29 Articles of the original Patent Law. We highlight a number of the notable changes below:
(1) Article 2: partial design protection
Partial design is brought into protection scope of design patent under Article 2 of the revised Patent Law. This amendment aligns Chinese patent law closer to the rules in other major jurisdictions, and meets growing demands of innovation entities. The amended Article means that design patent infringement could extend to copying the patented part of the design of a product even if the overall visual effect of the entire product is different. However, it remains unclear whether China will allow the use of broken lines to represent the partial design as the USPTO does. It also remains unclear whether the well-applied principle of holistic observation and comprehensive judgment for finding design patent infringement will still applies.
(2) Article 20: Prohibiting the Abuse of Patent Right
Article 20 of the revised Patent Law stipulates that the principle of good faith shall be followed when a patent application right or a patent right is exercised. The patent application right and patent right shall not be abused to damage public interest or legitimate rights and interests of others. Anyone abusing patent rights, eliminating or suppressing competition, if monopoly is found, will be facing legal actions based on the Anti-Monopoly Law of the People’s Republic of China. However, it will be interesting to see how this provision is applied in litigation in the future.
(3) Article 24: A New Grace Period Provision
Article 24 introduces a new provision that relates to grace period. Specifically, disclosure of an invention for public interest in case of national emergency can enjoy the grace period of 6 month, forming in total four situations that allow a grace period.
(4) Article 29: Domestic Priority for Design Patent
According to Article 29 of the revised Patent Law, a design patent application can claim and enjoy priority within six months from the date of filing a first design patent application for the same subject matter in China.
The current Patent Law stipulates that only patent applications for invention and utility model can enjoy domestic priority. The revised Patent Law permits all types of patent applications to claim and enjoy the domestic priority. Since the examination period for design patent is very short, the 6-month priority period stipulated in the revised Patent Law might, under some extreme circumstances, become a means for applicants to restore their rights. For instance, within the 6-month priority period, after a design is rejected or deemed withdrawn, its applicant can re-apply after a defect has been overcome based on this domestic priority provision.
(5) Article 42: Patent term compensation
Patent term compensation is available if the grant of an invention patent is delayed and takes more than four years from the date of filing of the application, or three years after a request for substantive examination, and such delay is not attributable to the applicant. It should be noted that such compensation is not automatic and must be applied for by the patentee.
(6) Articles 50 to 52: Open patent license system
Articles 50 to 52 of the fourth amendment of the patent law provide an “Open License” system. Specifically, a patentee may express in writing to CNIPA its willingness to license their patents to anyone and specify relevant royalties and method of payment. CNIPA will announce the patentee’s statement and offer the open license. Patent right evaluation report should be provided with the offer of an open license for utility model or design patent. If a patentee withdraws its offer of open license, it must do so in writing and CNIPA will announce the withdrawal statement. In this case, any previously granted open license shall not be affected.
The amended Patent Law further clarifies that during the open licensing period, a regular patent license can still be individually negotiated and agreed with the patentee. Moreover, in return for granting an “open license”, the amended Law provides that the patent annuities shall be reduced or exempted.
A patentee could not make an open license available for patents that have already been licensed exclusively, for patents that are subject to an ownership dispute or a court order for injunction/preservation, if the annual fee payment for the patent is delayed or if the patent is subject to a pledge where the pledgee does not agree to an open license
(7) Amended Article 71: Punitive damages and increased statutory damage
Under the current patent law, willful infringement and associated punitive damages are not available. These are introduced in Article 71 of the fourth amendment of the patent law. Specifically, for willful infringement on a patent right, one to five times of punitive damage can be applied, and the lower limit for statutory compensation has been increased from 10,000 yuan to 30,000 yuan, and the upper limit has been increased from 1 million yuan to 5 million yuan. Besides, This Article additionally contains a provision allowing for the shifting of the burden of proof relating to damages calculation from the patentee to the infringer. when the patentee has exhausted its efforts to provide evidence, while the evidence needed to calculate the damages is held by the infringer, the court can order the infringer to provide such evidence. If the infringer refuses to submit it to the court, or submits fabricated evidence, the court can determine the amount of damages based on the initial evidence and calculations of the patentee and on the failure of the infringer to satisfy their burden of supplying contrary evidence.
Finally, it is to be noted that compared with the current provisions, Article 71 slightly revised the order of the methods for calculating damages that should be used. Either the patentee’s actual losses or the benefits acquired by the infringer can be used first, whereas the current law requires that the actual losses must be tried first.
(8) Article 76: Pharmaceutical Patent linkage system
Amended Art. 76 introduces a so-called patent linkage system. The amended Patent Law provides that during the examination for market approval of a pharmaceutical drug, a patentee (or stakeholder) or the applicant can bring an infringement procedure before the court, while the drug authority can determine whether to hold the approval within a prescribed period according to an effective judgment. A patentee (or stakeholder) can also petition CNIPA for a decision.
It enables an applicant or patentee of a pharmaceutical patent to challenge a generic drug for patent infringement by initiating a declaratory judgement (DJ) action of patent infringement against the generic during the its regulatory approval process with the China Food and Drug Administration (“CFDA”).